OK, it works this way. The LLC is taxed as a Partnership. As such it files a Partnership Return (Form 1065). As you said you get a K-1. Your Schedule K-1 will show all kinds of mumbo jumbo. Let's discuss three classifications:

1. Securities gains and losses: Not taxable in the US if you are a nonresident alien and the gains or losses are not connected with a US trade or business.

2. Dividends from US companies: Taxable at the rate of 30%, and the partnership is required to wihhold and pay the money to the IRS. The rate may be lower if you are a resident of a country with which the US has a tax treaty.

3. Interest: Some interest is taxable, also at the 30% rate (or lower treaty rate). Interest from US banks, paid to a nonresident alien not engaged in a US business are generally exempt from US income taxation. (Congress doesn't dare change this...it would really screw up the US economy.)

I don't have any clients outside of the US, but do work in alternative investments (private placements), as part of our private wealth management platform. The K-1 is confusing, and not all accountants know what's what. exQQQQ is correct in this advice. My advice: find an accountant who has dealt with high net worth clients, and you should be able to rely on their advice. Take care!

Quote from exQQQQseme:

OK, it works this way. The LLC is taxed as a Partnership. As such it files a Partnership Return (Form 1065). As you said you get a K-1. Your Schedule K-1 will show all kinds of mumbo jumbo. Let's discuss three classifications:

1. Securities gains and losses: Not taxable in the US if you are a nonresident alien and the gains or losses are not connected with a US trade or business.

2. Dividends from US companies: Taxable at the rate of 30%, and the partnership is required to wihhold and pay the money to the IRS. The rate may be lower if you are a resident of a country with which the US has a tax treaty.

3. Interest: Some interest is taxable, also at the 30% rate (or lower treaty rate). Interest from US banks, paid to a nonresident alien not engaged in a US business are generally exempt from US income taxation. (Congress doesn't dare change this...it would really screw up the US economy.)

The term "connected with a US trade or business" was just a caveat inserted by me. In other words, let's suppose that even though you are a nonresident alien, that you were the owner or otherwise involved with the operation of a trade or business in the US. If that business received income from a US bank it would be taxable. It is in the law so that a US owned business would not be at a competitive disadvantage with a foreign owned business. Obviously if you were receiving income in connection with US investments, it would not be US business connected.

Based on the facts in your posting it is highly unlikely that this is part of a US trade or business.

OK, it works this way. The LLC is taxed as a Partnership. As such it files a Partnership Return (Form 1065). As you said you get a K-1. Your Schedule K-1 will show all kinds of mumbo jumbo. Let's discuss three classifications:

1. Securities gains and losses: Not taxable in the US if you are a nonresident alien and the gains or losses are not connected with a US trade or business.

2. Dividends from US companies: Taxable at the rate of 30%, and the partnership is required to wihhold and pay the money to the IRS. The rate may be lower if you are a resident of a country with which the US has a tax treaty.

3. Interest: Some interest is taxable, also at the 30% rate (or lower treaty rate). Interest from US banks, paid to a nonresident alien not engaged in a US business are generally exempt from US income taxation. (Congress doesn't dare change this...it would really screw up the US economy.)

This is some pretty complicated crap.

Good luck.

4Q

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Can anyone give a IRS pub reference to the securities gain for non-resident aliens?